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10 Dividend Stocks Still Paying Outsized Yields (Update2)

(Story updated to add that Goldman Sachs upgraded Enbridge Partners to "neutral" from "sell" on Wednesday.)

BOSTON (
TheStreet) -- It's apparently going to take a prolonged stock market rally with no corrections to get investors back into equities this year. Their risk-averse posture has them cowering in bonds, despite the Dow Jones Industrial Average's close above 13,000 and the
S&P 500's best February performance in 14 years.

That means the average investor is likely missing out, once again, on gains that could make up for the losses of the past few years. One way to stick a toe back in the market is to buy stocks of financially strong companies with high, growing dividends.

But investors clearly like the safe haven that bonds offer, as they did last year, despite their historically low yields, because 2011's slim 2.1% gain after a year-long roller-coaster ride has turned many into nervous nellies.

Indicative of that, the Investment Company Institute said Wednesday that in the five weeks through Feb. 22, investors poured $38.8 billion into bond funds, but a mere $5 billion into equity mutual funds.

And that's despite the stock market rally. S&P 500 stocks have an average total return of 9.5% this year, including a yield of 2.1%. In comparison, one of the biggest bond funds, the top-ranked
Pimco Total Return(PTTRX), has a total return of 2.92%.

Logic would tell you that high-quality stocks with steady dividends would probably be the place that investors should be, since they offer both the chance for share-price appreciation and big yields.

And given that dividends accounted for about 45% of the S&P 500's return over the past 80 years, such stocks' long-term appeal should be unquestioned.

So we screened Morningstar's database for shares of companies with a market value of over $5 billion, financial fundamentals grades of B or better (per Morningstar's analysis), strong long-term growth prospects and the highest current dividend yields.